Would it be possible for you to give group quizzes in class so all the students could work together? Maybe that would make him feel less pressured. Or perhaps testing their knowledge some other way (through a game, etc.) so that they wouldn't really know you were testing them.

I think talking to his parents about the problem is a must though. I just worry that the people around him will label him a 'wonkta', including your director, and give up on him. If they recognize the problem early and help him through it maybe things can turn out OK.

It seems like he has an anxiety problem or something. At this age English (and learning) should be fun for kids and not stressful, but it sounds like it's stressing him out more than anything. I'm guessing he's like this in other classes too. Any way to find out?